Dutch government eyes more recovery time
NETHERLANDS - Piet Hein Donner, the Dutch pensions minister, is today expected to tell the Dutch cabinet pension funds should be granted a recovery period of five instead of three years, IPE understands.
The news comes after weeks of campaigning from the Dutch pensions sector, which has been pleading for a bespoke approach from the regulator DNB to give pension funds more time.
DNB, the Dutch central bank and pension regulator, today declined to comment, though the president of the Dutch central bank and pension regulator said earlier this month the regulator would decide before 1 March whether pension funds will be given more time to recover from the credit crisis. (See earlier IPE story: Cautious DNB examines recovery time)
ABP, the largest Dutch pension fund, today said a substantial extension of the recovery period would accommodate the fund's desire to "build more space for recovery".
Hans van der Windt, director of PME, the €18.7bn pension fund for the metal and electronics sectors, also said earlier this month he wants the pension regulator to adopt a tailor-made approach that enables pension funds to recover at their individual pace. (See earlier IPE story PME campaigns for bespoke recovery approach)
PME, like most pension funds, can restock its buffers within 15 years - as required by the pension law if its cover ratio is between 105% and 125% - according to Van der Windt, though recovering from the current funding shortage within three years could become "problematic".
And last month, Gerard Riemen, director of the Dutch association of industry-wide pension funds (VB), joined several unions and employer representative bodies in their plea to give pension funds more time to recover. (See earlier IPE story: VB joins pressure for more recovery time)
According to a survey into the 2008 preliminary annual results of its own members, VB estimates the average cover ratio is around 90%, and pension funds are therefore underfunded.
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